Where We Stand: Affordable Housing Inventory
Calls for more affordable housing are growing as Hawaii's housing market continues its hot streak of rising home prices.
According to the real estate firm Locations Hawaii, median sales prices for a single-family home in the islands reached nearly $900,000 in May. Condominium units also rose to half a million dollars during that month.
But what does that mean for the state's affordable housing?
"I actually worry a lot about the loss of rental housing," said Philip Garboden, professor of affordable housing at the University of Hawaii at Mānoa's department of urban and regional planning.
"You know, renters, it's not like they're all of a sudden richer than they used to be. In fact, many of them are much poorer due to what we've all just came through. And if I'm a landlord of a single-family home in Honolulu right now, it looks pretty good to take that home, put it on the market and sell it to somebody who wants to pay me a million-plus for that property."
Garboden says the current housing market trend in the state, and across the country, is emphasizing the demand for more affordable housing.
"The trend is clearly housing prices rising faster than inflation," he said. "We don't build enough, and there's huge demand for what exists. And so every house has multiple people who want it, and the prices just keep going up."
A 2015 report from the state department of business, economic development, and business projected the state needs to build up to 66,000 affordable units within a decade. The units would be specifically for households that make 80% of the area median income (AMI) or below.
An updated forecast in 2019 by the department lowered the goal to 12,000 units by 2025.
Denise Iseri-Matsubara, executive director of the Hawaii Housing Finance and Development Corporation, says that forecast was based on the projected out migration of residents - which has steadily increased in the last decade.
Iseri-Matsubara says there are roughly 26,000 affordable rental units available through the state. That includes units in public housing and privately owned properties that used state funds to develop.
"The actual inventory is much, much larger, because we don't track the affordable [units] produced through the counties inclusionary zoning or 201(H) process," she said.
Iseri-Matsubara says there are three projects on Oahu that will become available soon. Apartment buildings called The Block and The Ililani in Kakaako, and The Central near Ala Moana. The Block and The Central are expected to go online sometime in the fiscal year 2022.
All combined, these three developments add just under 1,000 units to the state's affordable unit inventory.
At that rate, the state is lagging behind its 2025 goal.
But there are challenges to developing affordable housing.
"Building affordables is not really affordable," she said. "It takes a lot of government subsidy, especially for rental units in the form of gap financing or rental housing revolving funds."
The state Legislature earmarks money for the rental housing revolving fund. The fund is used by the state to help with development costs.
Another challenge facing affordable housing projects is the permitting process in each county.
"It takes a lot of perseverance," said Iseri-Matsubara.
Both Garboden and Iseri-Matsubara say in order to increase housing inventory, there needs to be significant investment in infrastructure.
Another challenge facing affordable housing development is resident sentiment. Specifically, residents not wanting an affordable housing project in their neighborhood.